January 18, 2023
What is the HBRP?
The Home Buyer Rescission Period (HBRP) came into action on January 3rd, 2023.
The province of BC has adopted amendments to the Property Law Act which puts a mandatory cooling-off period into effect. This gives home Buyers three days to rescind their offer. The three days begin as soon as there is an accepted offer and the Buyers have until the end (midnight) of the third day (does not include weekends or holidays).You do not have to give a reason to rescind the deal but you do have to pay the Sellers a rescission fee which is 0.25% of the purchase price.
Why was it implemented?
The goal of the HBRP is to slow down the market and give Buyers time to re-evaluate whether their purchase is the right decision. Last year, many Buyers were putting in unconditional offers to outdo other Buyers. The quick and sudden decisions sometimes left Buyers regretting their offers with no way to undo it.
How does the rescission amount get paid?
If a deposit was made, the rescission amount will be taken out of the deposit amount. If the deposit is less than the rescission amount, the Buyer(s) will have to pay the shortfall to the Seller(s) promptly. If the rescission amount is less than the deposit, the remainder will be returned back to the Buyer(s). If no deposit was paid within the rescission period, the Buyer(s) will be responsible for paying the Seller(s) in a timely manner, no longer than 14 days.
What properties are subject to the HBRP?
-Apartment in a duplex or other multi-unit dwelling
-Residential strata lot
-Manufactured home that's affixed to land
What properties are exempt?
-Residential real property on leased land
-Leasehold interest in residential real property
-Residential real property sold at auction
-Residential real property sold under court
-A purchase and sale of property under REDMA
-Mobile homes in a park
-HBRP still applies to those who wish to be unrepresented (homes for sale by owner or buyers who wish not to be represented by a realtor)
-Even if the seller(s) and buyer(s) agree to cross out the rescission period from the contract or alter the amount of the rescission fee, it is prohibited to do so. This amendment cannot be cancelled or changed.